January 20, 2009 / 2:54 PM / 10 years ago

UPDATE 1-Lee Enterprises Q1 profit falls; cuts jobs by 10 pct

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Jan 20 (Reuters) - Lee Enterprises Inc (LEE.N), which publishes 49 daily newspapers including the St. Louis Post-Dispatch, said its quarterly profit on a preliminary basis fell 69 percent and cut its staffing by more than 10 percent.

U.S. newspapers are grappling with steep declines in advertising revenue and a shift in the habits of readers from printed newspapers to free online editions.

First-quarter earnings from continuing operations were $6.8 million, or 15 cents a share, compared with $22.1 million, or 48 cents a share, a year ago.

Total operating revenue from continuing operations fell 13 percent to $243.6 million for the quarter ended Dec. 28.

Combined print and online advertising revenue fell 15.2 percent to $184.6 million, with retail advertising down 9.8 percent and classified down 27.1 percent, the company said.

Davenport, Iowa-based company said it has outsourced or consolidated printing in several locations so far.

Lee said its newspapers are moving to narrower page widths to conserve newsprint and that it has discontinued less profitable specialty publications.

Lee expects to reduce cash costs in 2009 by 10 percent to 11 percent.

Several other newspaper publishers, including the Washington Post Co WPO.N, the New York Times Co (NYT.N), McClatchy Co (MNI.N) and Tribune Co, have resorted to buyouts and layoffs to reduce costs.

Recently, Gannett Co Inc (GCI.N), the largest U.S. newspaper publisher, said it would make workers take a week off without pay to avoid more layoffs.

Shares of Lee closed at 36 cents Friday on New York Stock Exchange. They have lost 97 percent of their value since they touched a 52-week high of $13.31 in February 2008. (Reporting by Purwa Naveen Raman in Bangalore; Editing by Anil D’Silva)

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